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Jul 24, 2018

Pew research: Only Gen X recovered lost Great Recession wealth

Members of Generation X were the only generation to recover wealth lost
during the Great Recession, Pew Research Center analysis of Federal
Reserve data found.
Gen Xers experienced the greatest decline in home equity and net worth
among any generation between 2007 and 2010, but saw the median net worth
of their households rise by 115 percent as of 2016 and their home
equity levels double since 2010, according to the research.

The median net worth of Gen X households declined 38 percent from
$63,400 the start of the Great Recession in 2007 to $39,200 in 2010
after it ended and the median home equity of Gen X homeowners dropped 43
percent from $66,000 to $37,600 in the same time period.

During this period members of Generation X were between the ages of 27
and 42, meaning they were newer to the housing market and more likely to
buy houses at peak prices and take more mortgage debt to do so, Pew
said.

"About half of the assets they owned were in the value of their primary
residence, whereas households headed by a member of the Baby Boom or
Silent generation had a higher share of their money in financial assets
such as checking or retirement accounts," Fry wrote.

Comparatively Baby Boomers saw their net worth drop 26 percent and their
home equity decline by 28 percent, while members of the Silent
Generation saw a 14 percent decline in net worth and a 15 decrease in
home equity.

Millennials -- the oldest of whom were 26 at the start of the Great
Recession -- experienced losses in employment and earnings, but were
just beginning to form households and accumulate their own wealth,
leaving them with little wealth to lose.

However, a number of factors allowed members of Generation X to fully
recover their wealth since the Great Recession. The net worth of an
average Gen X household reached $84,200 by 2016, surpassing its
pre-Great Recession number of $63,400.

"As of 2016, the median wealth of households headed by Boomers and the
Silent Generation remains below 2007 levels, though their household
wealth still exceeds that of Gen X," Fry wrote.

Their home equity doubled since 2010 due to lender foreclosures
appreciating home values and mortgage modifications and their financial
assets assets also nearly doubled from $11,300 in 2010 to $21,600 in
2016, while financial assets for Baby Boomer and Silent Generation
Households remained the same.

Additionally, Gen Xers remain in prime working age and their median
adjusted household income increased more than 20 percent to $73,200 in
2016.

"Gen X's ability to rebuild its wealth may reflect its relatively robust
household income growth since 2010," Fry wrote. "The oldest Gen Xer was
51 as of 2016, meaning that Gen X workers are still approaching their
peak earning years. The number of Gen Xers in the labor force has
remained stable since 2008, whereas the Boomer and Silent labor force
has shrunk through retirements and deaths."